HMRC says 90% of PSCs are not complying with the IR35 rules. Shifting the burden to the client engager should, logically, bring much of this non-compliance to an end. But what will happen in the transition? If a more risk-averse client engager determines that IR35 applies to a pre-existing relationship, and nothing has changed on the ground, the PSC is potentially being thrown under the bus for the past. The PSC has a limited right to challenge an adverse determination and clients/agencies should think about what measures to put in place to minimise the fall-out. Such widespread non-compliance also begs the question about how much of it is fraudulent, what the client/agency’s representatives have known about it and whether there is a risk of prosecution under the Criminal Finances Act 2017.
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HMRC says 90% of PSCs are not complying with the IR35 rules. Shifting the burden to the client engager should, logically, bring much of this non-compliance to an end. But what will happen in the transition? If a more risk-averse client engager determines that IR35 applies to a pre-existing relationship, and nothing has changed on the ground, the PSC is potentially being thrown under the bus for the past. The PSC has a limited right to challenge an adverse determination and clients/agencies should think about what measures to put in place to minimise the fall-out. Such widespread non-compliance also begs the question about how much of it is fraudulent, what the client/agency’s representatives have known about it and whether there is a risk of prosecution under the Criminal Finances Act 2017.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")